BRL and IBOVESPA Soar on Bolsonaro Win, Optimism May Not Last

TALKING POINTS – Brazil, BRL, IBOVESPA, Bolsonaro

  • Jair Bolsonaro won the presidential election in a landslide victory
  • Brazilian Real and local equity markets rejoiced from the outcome
  • Optimism may be short lived – Bolsonaro faces potential resistance

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The Brazilian Real and benchmark IBOVESPA equity index – as forecasted – soared when Brazil’s most controversial election since 1985 finally produced a victor: Jair Bolsonaro of the Social Liberal Party (PSL). Bolsonaro officially takes office on January 1, 2019.

Brazilian Real Rising on Bolsonaro’s Popularity

BRL/USD - Daily Chart

He cruised to victory garnering 55.54% of the vote, a 10-point lead over his counterpart Fernando Haddad of the Worker’s Party, who came in at 44.46%. In the Senate, the PSL gained four seats – up from zero – and in the Chamber of Deputies, Bolsonaro’s party holds 52 seats, up from 44.

However, the National Congress of Brazil – the federal government’s legislative branch – is fractured

Article source: https://www.dailyfx.com/forex/fundamental/article/special_report/2018/11/07/BRL-and-IBOVESPA-Soar-on-Bolsonaro-Win-Optimism-May-Not-Last.html